Disclaimer May Be Driven Out of Court

When you leave your car at a repair shop, you usually sign a standard order form that contains a disclaimer that says something to this effect: "Not Responsible for Loss or Damage to Cars or Articles Left in Cars in Case of Fire, Theft or Any Other Cause Beyond Our Control."

There may be a moment of idle curiousity in which you wonder whether that sort of disclaimer will stand up in court, but as long as your car is returned in good condition, you probably haven't bothered to find out.

Michael Gardner found out, the hard way. His 1976 Porsche 911 was stolen in June, 1978, while it was parked in a repair garage. He sued the garage shop and was awarded $16,000. In 1986, his case reached the California Court of Appeal, which upheld his victory and clarified the law for the rest of us.

"This case raises an issue common in daily life yet one which has received almost no attention in California appellate decisions," wrote Justice Leon Johnson, the author of the decision. "May an automobile repair garage avoid liability for its negligence by having car owners sign a waiver form when they leave their cars with the garage? In this opinion, we hold they cannot."

In general, a party cannot contract away liability for his fraudulent or intentional acts or for violations of statutory law. On the other hand, a contract that exempts a person from liability for ordinary negligence is valid where no public interest is involved or no statute expressly prohibits it.

If you didn't understand that last paragraph of legalese, you're probably not alone. Let's try it with an example. If a repair-shop form has a disclaimer of liability, but the owner of the shop takes a sledgehammer to your car in a fit of anger, the contractual liability limitation won't stand up--it won't protect him from his intentional act.

But a disclaimer or exculpatory clause will be valid unless a court decides that the contract affects the public interest. And in the Gardner case, the court ruled that an automobile repair shop agreement affects the public interest, so the clause was invalid, and Gardner could recover for the garage's negligence in allowing the car to be stolen.

The determination of whether the public interest is affected involves a six-part test that could take a law professor hours to explain properly. But here are the basic reasons given in this case, oversimplified here, of course:

Car repair shops are licensed and regulated businesses. They perform a service of great importance to the public, a practical necessity to a large number of consumers. They perform this service for anyone who owns an automobile. The garage shop has a decisive advantage of bargaining strength and uses a standardized printed form contract of exculpation. And the car in question was under the control of the garage and subject to the risk of carelessness by its employees.

Although this case was limited by its facts to a garage repair shop, the reasoning behind it may also apply to other standard form disclaimers, such as those found in the tickets given out by parking attendants. In fact, there is a specific statute (Civil Code Section 1630.5) that says a disclaimer limiting liability for the theft of a motor vehicle is not valid in situations where you were required to leave the keys with the attendant or in the car.

To most of us, this is merely interesting stuff. But if your car is damaged or stolen, this can be crucial information, especially if you've decided to go to small claims court to pursue your claim.

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